Carrot & Stick

BP raising EPOS fees, but offering reduction for fraud efforts

Carole Donoghue, Petroleum Editor

WARRENVILLE, Ill. -- BP has told its marketers that its costs to run its electronic point-of-sale (EPOS) system, known as the LinxSimple, have increased, and it's going to have to raise the fees it charges them as a result, CSP Daily News has learned.

However, it is willing to give them a cash incentive if they can reduce fraud at their stations, the British oil major said in a message to marketers.

BP officials said the company's upkeep and other costs to operate its system have continued to climb by approximately 11% a year, but it has not yet passed through those extra expenses to marketers. That will change in January 2012.

"Your monthly site charges have remained unchanged ($75) since the initial system deployment in 2004. However, in order to deliver the same quality service you have come to know … we now find it necessary to raise the monthly fees by $25," the company told marketers.

BP said marketers can reduce the fees if they take steps to lower fraud at their stations, however.

If they can show that they achieved a fraud-to-sales ratio of .01% at their stations in 2011, they will get a $15 monthly credit on their CommLinx bill.

BP said the fraud-to-credit ratio will be calculated as the total amount of all chargebacks, divided by the total amount of all payment card sales annually. For example, if a station does $3 million a year in payment card sales in 2011 and ends the year with $230 in total chargebacks, the ratio would be .008%, which is less than .01%.

BP, based in London, with U.S. headquarters in Warrenville, Ill., markets more than 15 billion gallons of gasoline every year to U.S. consumers through more than 11,000 BP- and ARCO-branded retail outlets and supplies more than four billion gallons of fuel annually to fleets, industrial users, auto and truck manufacturers, railroads and utilities. BP is the single, global brand formed by the combination of the former British Petroleum, Amoco Corp., Atlantic Richfield (ARCO) and Burmah Castrol. BP is a global producer, manufacturer and marketer of oil, gas, chemicals and renewable energy sources.